LIVE MARKETS-Opening snapshot: earnings shine through timid start

8 Min Read

March 14 - Welcome to the home for real time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to
share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net
OPENING SNAPSHOT: EARNINGS SHINE THROUGH TIMID START (0817 GMT)
European shares are pulling higher from a negative open, but the real action is on the
single-stock level where results are spurring some decent-sized moves.
Adidas is currently the biggest gainer after its results and share buyback announced, while
news of Prudential's demerger has sent its shares up around 5 percent.
A strong showing from the miners is also helping prop up the market thanks to some solid
industrial production figures out of China.
A decline among energy stocks and industrials is pulling the market lower, however, as
results knock shares in chemicals firm Brenntag and postal services provider Bpost.
Here's your opening snapshot:
(Kit Rees)
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MORE APPETITE FOR SUPERMARKET STOCKS? (0758 GMT)
Food retail is a tough area at best, given the threat posed by online giant Amazon. If you
look at a chart of how the UK grocers have performed over the past year, one thing stands out -
Ocado is the best performer. So online is key.
Today's results from Morrisons though could give investors something to cheer about.
MRW beat forecasts and announced a special divi, thanks to wholesale and an online push (the
results mention initiatives such as a store-pick online service and 'Morrisons at Amazon').
"Today's release points to considerable self-help still available to drive future earnings
gains," analysts at Jefferies analysts say in a note.
"Earnings visibility and income support are key to our Buy. Both appear well underpinned
after the finals," Jefferies add.
Traders are calling Morrison's shares 2 percent higher today. And on a positive note, all of
the UK supermarkets are outperforming the FTSE 100 so far this year.
(Kit Rees)
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WHAT TO WATCH FOR THE EUROPEAN OPEN (0752 GMT)
European shares are set to follow Asia’s lead and fall further on Wednesday, with futures
down 0.1 to 0.3 percent, after jitters over world trade were reignited by President Trump’s
threats of tariffs on Chinese imports, and investors continue to digest political uncertainty
after Trump fired his Secretary of State.
"Even before this latest firing, the turnover rate among high-level staff and cabinet
members had been higher than under any other president in the past 40 years," UniCredit
strategists wrote in a note.
Better-than-expected Chinese industrial production figures boosted metals prices and should
help mining stocks gain on Wednesday, though concerns on trade could cap gains.
As earnings continued to come through, retailers will be a focus after Zara owner Inditex
and Adidas reported. The German sportswear company is seen up as much as 6 percent at the open
after it announced a large share buyback and increased its profit forecast for 2020.
Investors are also likely to cheer Morrisons after the UK’s no.4 grocer beat forecasts and
announced a special dividend.
M&A news includes Prudential’s plan to spin off its UK and European business from
international businesses, and news that Atlantia and ACS have reached an agreement over their
joint control of Abertis. Quite a range of pre-market calls for Prudential, seen up 2 to
10 percent.
Also in focus will be stocks with Russia exposure in case of market reaction after a war of
words between Britain and Russia escalated overnight when Russia did not respond to a British
ultimatum for an explanation of the nerve agent attack in Salisbury.
Additional headlines:
Australia picks Rheinmetall as preferred supplier for $2.5 bln contract (beats BAE)
BRIEF-Bpost Sees Recurring EBITDA In Range Of EUR 560-600 Million In 2018
Drugmaker Hikma posts lower-than-expected 2017 profit
(Helen Reid)
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COMPANY NEWS HEADLINES: MORNING ROUND-UP (0739 GMT)
Prudential to spin off UK and European business in radical break-up
Morrisons pays special dividend after profit rises 11 pct​
Adidas forecasts slower sales and profit growth for 2018
Adidas to buy back up to 9 pct of share capital
Zara owner Inditex full-year profit up 7 pct
Britain's Balfour Beatty's annual profit almost triples
Italy's Atlantia and ACS reach agreement over joint control of Abertis
Air France rejects wage demands as another strike looms
SocGen in exclusive talks to buy Commerzbank's EMC unit -Handelsblatt‍​
American Tower, KKR are bidders for Altice NV's towers-Bloomberg
Italy's Snam raises investment, profit targets to 2021
Raiffeisen proposes dividend of 0.62 eur/shr
Clas Ohlson Q3 operating profit falls
MEDIA-Tesla treasurer and VP of finance leaves the company - Bloomberg
IHG acquires 51% stake in Regent Hotels & Resorts
(Tom Pfeiffer)
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FUTURES POINT TO NEGATIVE OPEN (0713 GMT)
Futures are down across the board, indicating European stocks aren't going to have an easy
reprieve after yesterday's falls, as fresh tariff threats add to uncertainty over trade.
Retailers are front and centre of results this morning, with Adidas and Inditex reporting.
The German sports fashion company is seen gaining 3 percent in pre-market indications after it
forecast sales and profit growth would continue in 2018, albeit at a slower pace.
Inditex meanwhile reported a seven percent jump in annual profit, despite negative headwinds
from a strong euro.
Meanwhile M&A could also be a mover after Atlantia and ACS reached an agreement overnight
over joint control of Abertis.
(Helen Reid)
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INVESTORS SEE SEVERE BREXIT DELAYS (0650 GMT)
Fewer than 20 percent of investors now expect a transition deal to be agreed before the
March EU summit, according to Barclays' monthly Brexit investor survey conducted last week.
Almost two thirds of those surveyed expect an agreement to be delayed to the October EU summit
or beyond.
Barclays analysts say the EU's draft treaty "brought the issue of the Irish border back to
the fore and the importance of resolving it before transition talks can begin, in order to avoid
talks stagnating later." Hence investors' increasing doubts an agreement can be hashed out in
time.
Looking further ahead, only 13 percent expect an agreement to be reached before the March
2019 deadline. A large minority of investors, 24 percent, expect the UK and EU to fail to agree
the outline before the transition period ends.
(Helen Reid)
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MORNING CALL: TARIFF JITTERS TO SPREAD TO EUROPEAN SHARES (0624 GMT)
Good morning and welcome to Live Markets.
European stocks are called to decline further today as the latest protectionist policy push
creates more uncertainty and pessimism over world trade.
Asian shares reversed overnight as investors digested the threat of new U.S. tariffs on
Chinese imports and President Trump's move to fire his Secretary of State, which had already
sent Europe and Wall Street skidding.
Trump is seeking to impose tariffs on up to $60 billion of Chinese imports, targeting the
technology and telecoms sectors in particular.
Spreadbetters call the DAX 79 points lower at 12,143, the CAC 40 down 27 points at 5,215,
and the FTSE 100 27 points lower at 7,112.
(Helen Reid)
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